GM Bets Big on Its Next Generation Pickups

At a time when pickup truck sales are picking up, General Motors has taken the wraps off of the next generation of its bread and butter pickup trucks: The Chevy Silverado and the GMC Sierra.

"This is a gorgeous truck," said Mark Reuss, President of GM North America. "This isn't going to be ostentatious. It is going to be highly engineered, highly thought out and positioned well from a market standpoint."

The new Silverado and Sierra each feature much needed updating both in styling and performance. The look of both trucks has been updated with an all new cab, and come with a V-6 or V-8 engine — delivering competitive fuel efficiency. (Read More: Ford Hybrid MPG Dispute Won't Slow Sales)

Reuss noted the new trucks are "positioned quite differently than our competition."

General Motors knew this would be a tricky conversion. Still, after months of planning the country's largest automaker finds itself wrestling with a dilemma — phasing out a glut of current generation pick-up trucks to make room for the next-generation of trucks in late Spring.

At the end of November, GM was sitting on 139 days supply of pickups. That is nearly double the preferred, normal supply of any vehicle. As a result, GM has been forced to add another $2,000 in incentives to help clear out the backlog.

For a company that has been showing uncharacteristic discipline when it comes to avoiding higher incentives, the move to goose sales is a reminder of the old GM. Before it went through bankruptcy, GM was putting so much money on the hood of its vehicles it cut into profits. Reuss explained how this new round of incentives is different and more a case of keeping up with the competition. "We missed November and calling the incentive load that we had, we have corrected that."

Catching Up in Pickup Sales

For General Motors, the new trucks will hit showrooms at a critical time. The pickup truck market has started to pick-up with the recovery in housing. With the oldest truck models in showrooms, GM has lagged its competitors in sales.

Reuss expects GM to catch-up with the competition as it clears out the current Silverado and Sierra models and transitions to the next-generation in the Spring. "We think we will be in good shape here as we take our plants down and introduce the new truck," Reuss noted. "We are right on track. We think we are in a good place."